The cliche is that the market climbs a wall of worries, but the specter of the Dow breaking 13,000 was accompanied by a chorus of arguments from informed observers that the enthusiasm was overdone. Roughly six weeks ago, in “How long will the markets be able to defy gravity?,” the Financial Times’ Martin Wolf looked […]
Read more...Yesterday, there was widespread commentary on the 8.4% fall in existing home sales in March. Some other factoids have gone comparatively underreported. From Nouriel Roubini’s RGE Monitor: [T]he Case-Shiller home price indices for February showing continued fall in home prices. The 10-city index fell 1.5% y-o-y; this is the lowest level since October 1993. The […]
Read more...Both Bloomberg and the Financial Times have prominent stories on the truly terrible existing home sales results for March. The National Association of Realtors announced that sales fell 8.4% in March, following a 3.7% rise in February. Price declines also worsened in 20 major cities. Some of the fall can be attributed to crappy weather, […]
Read more...For some time, we have argued that the subprime meltdown in and of itself would not lead to a recession, but would put a crimp in growth (the estimate we find most credible is a 1% reduction in GDP growth for the year starting last September). In addition, we saw the subprime crisis as the […]
Read more...Barry Ritholtz in “Watching Trading Volume Fade Out” points out that the March stock market rally, while producing impressive gains, has done so on falling trading volumes. This is an important technical indicator. The run up to the 1987 crash featured record highs on decreasing volumes. Mind you, we aren’t saying there will be a […]
Read more...Barry Ritholtz takes exception to this chart (he thinks markets today bear a resemblance to 1972-1973, which isn’t a cheery comparison by any stretch of the imagination) but enough readers sent him it to him that he relented and posted it:
Read more...Barry Ritholtz has a good post today on how the inflation stats are being presented in a particularly misleading fashion. We already have the proud history of CPI being redefined in the 1990s to lower the published inflation rate. As an economist buddy explained: There was a big fuss over the CPI some years ago. […]
Read more...If you believe in technical analysis, when a commodity or security price falls below a “support level” it will continue in the same direction until it finds a new (lower) support level. Even if you don’t subscribe to this school of thought, it is surprising and likely Not Good that the dollar is falling. One […]
Read more...Brad Setser, who is normally an upbeat counterpoint to permabear Nouriel Roubini at RGE Monitor has an unusually worried post on what the end game might look like for foreign purchases of the US dollar (the central element of the oft-discussed global imbalances). We found this post courtesy Brad DeLong. Setser focuses in on a […]
Read more...The always-informative Barry Ritholtz has long been of the school that the economy is in worse shape than most prognosticators admit, and the downside risk in the market is correspondingly greater. Below is his latest take on historical analogies for our current situation, and they aren’t pretty: To me, the popular 1995 soft landing scenario […]
Read more...We thank Seeking Alpha for this item: Birinyi’s Ticker Sense submits: An article in yesterday’s New York Post warned readers that they should be cautious about the future path of the stock market. Unlike the typical bearish arguments however (the falling dollar, rising deficit, geopolitical turmoil, slowing earnings growth, etc.), this article had a unique […]
Read more...The Wall Street Journal reports that the National Association of Realtors has cut its forecast for 2007, from a fall in median sale price of 0.7%. The IMF also issued a report cutting its growth estimate for the US from 2.9% to 2.2%, based on the detrioration of the housing market. This is bigger news […]
Read more...The ever-informative John Dizard of the Financial Times inspects the theory that the US economy will be shored up by the spending of LBO proceeds and finds it wanting: There’s a thought in the market that while the Wal-Mart consumer has been hit by the weaker housing market, the economy will be bailed out by […]
Read more...Is the Wall Street Journal averse to bad news? That may seem a bizarre question to ask about any news organization, since by definition, most news is bad news. But we’ve noted before that the Journal has seemed particularly loath to pick up on certain stories that were covered aggressively in the Financial Times, such […]
Read more...A story today in the Baltimore Sun, which we found via The Housing Bubble Blog, suggests that foreclosures may be increasing faster than anticipated in some widely-cited mortgage market analyses. There are two troubling data points in this article. The first is that foreclosures are increasing at a rapid pace in the suburbs, a year-to-year […]
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